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The council’s budget

After increasing the South Gloucestershire element of the council tax in 2016/17 for the first time following a freeze for five years from 2011/12 to 2015/16, the council increased its share of the council tax for 2017/18 by 4.99%  and is now increasing its share by a further 5.99% in 2018/19.  Of this 5.99%, 2.99% relates to the general council tax precept and 3% for adult social care.  The 2018/19 Budget also includes updated details of the Council Savings Programme (CSP) and introduces the Transformational Change and Bending the Curve programmes. During the last seven years, to the end of 2017/18, the council will have reduced annual spending by more than £63m through a range of efficiency measures. The current CSP is planned to deliver a further £10.5m by 2020/21 however further savings have been identified under the Transformational Change and Bending the Curve programmes with savings targets of £8.5m and £8.2m respectively.  Overall the council has savings of £27.2m to deliver by 2021/22 and a core funding deficit thereafter of circa £5m per annum.

The first pie chart below indicates where the council will obtain its funding for 2018/19. 21.2% will come from council tax payers (of which 1.5% is ring fenced for Adult Social Care), 10.4% from business rate payers, 48.0% from government and 20.4% from sales, rents, and fees and charges.

Council services and how they are funded - 2

Chart 1 – Council services and how they are funded

The services on which the council spends the money

Chart 2 – The services on which the council spends the money

The second pie chart shows the services on which the council spends the money. 34% is spent on schools, about 26% on services for young people other than at school, and for the elderly and those with disabilities and public health, with another 18% being spent on transport, environment and community services. The remaining expenditure amounts to about 5% for capital financing and 17% on a range of other services.

The council has consulted residents on its budget proposals. Over 1,000 responded. As in 2017/18, about half thought the council offered good value for money, most thought the council was right to focus on savings by being more efficient in its use of assets such as land and buildings, changing working practices to make better use of technology and more efficient ways of working, and working in partnership and sharing services with other councils and public sector agencies. All the council’s core activities were supported by the majority of respondents. The highest levels of support were for maintaining safe and clean communities, safeguarding vulnerable children and adults, and delivering jobs, homes and infrastructure. The council has recognised these views in setting its budget.

In addition to setting its budget and council tax for 2018/19, the council has also looked at the next ten years’ plans. The government has previously announced its intention to change the way all councils are to be financed by 2019/20 when the main government grant will cease and councils will be able to retain all the business rates they collect rather than just half as is the case currently.  It is anticipated that this will come into effect from 2020/21 and significant work and engagement with local government has already been undertaken by central government and will continue over the forthcoming financial years. Alongside some other devolution areas, the councils in the West of England Combined Authority area (which includes this council) entered into a pilot for100% rates retention from 1 April 2018 and the council continues to include an estimate of the forecast one-off gain in its forecasts for 2018/19 and 2019/20.

The council expects that further investment will be needed in services for the over 65s and for vulnerable young people over the next few years.

The council has used the new power to issue an additional ring fenced 3% council tax to contribute to meeting the demographic and service pressures in adult social care in 2018/19. This is in addition to the forecast 1.99% increase in council tax which was indicated would be needed for 2018/19 in last year’s budget. This is in line with government expectation for authorities like South Gloucestershire Council.

In order to achieve a balanced budget in the medium term, the council needs to achieve the savings identified in its budget proposals amounting to an additional £6.9m p.a. savings in 2019/20, £5.1m p.a. in 2020/21 and £5.3m in 2021/22, plus the full delivery of its previously identified council savings programme of a further £10.5m p.a. by 2020/21. In addition to this, it retains a core deficit of c. £5m in 2021/22 for which further savings will need to be identified.  More detailed savings proposals will be made to Cabinet in the summer and any decisions impacting on staff or residents will be subject to the appropriate consultation.